JUDGMENT
R.K. Abichandani, J.
1. The petitioner seeks to challenge the order dated 24th December, 1992, passed by the 5th Joint Civil Judge (S.D.), Surat, below application Ex. 100, in Regular Civil Suit No. 497 of 1964, by which the document which was produced at Ex. 97 was impounded, holding that it was liable to stamp duty of Rs. 75,590/- and a penalty of Rs. 7,55,900/-.
The petitioner instituted the suit for specific performance of an agreement to lease dated 10-3-1983 by directing the respondents to place the petitioner in possession of two floors of the premises bearing Nondh 2509 situated at Ward No. 4, Surat. It appears that during the proceedings the document dated 10-3-1983 was produced and exhibited at Ex. 97. Thereafter, the respondents made application Ex. 100 on 11-8-1992 contending that the document could not be admitted in evidence as it was not registered nor was it properly stamped. The application was contested by the petitioner contending that the said document was only a memorandum of understanding and was not a lease deed. The learned trial Judge was of the view that even an agreement to lease fell within the purview of Article 30 of the Bombay Stamp Duty Act, 1958, hereinafter referred to as ‘the Act’, and, therefore, the stamp duty as was leviable on conveyance under Article 20 was leviable on the document in view of the provisions of Article 30(c) of Schedule I to the Act.
2. The Learned Counsel appearing for the petitioner submitted that the document in question was an agreement to lease under which there was no transfer of any interest made in presenti. It was, therefore, only a memorandum of agreement which was subject to a duty of Rs. 10/-under Article 5 (h) of Schedule I to the Act. The Learned Counsel for the respondents, Mr. Sanjanwala, submitted that it was difficult to support the order made by the trial Court as the document was only a memorandum of agreement which could not have been impounded. Under the document Ex. 97, it was stipulated that on completion of construction of two floors, the premises would be given on rent to the petitioner at a monthly rent of Rs. 7.500/- and a rent note shall be executed accordingly. At the time of executing the rent note a security deposit of Rs. 45,000/- would be given. It is clear from the nature of the document Ex. 97 that there is no actual demise made and it is only an executory instrument binding the parties, the one to grant and the other to accept the lease in future in respect of the two floors which were to be constructed.
3. The relevant provisions of Article 30(c) which have been made applicable by the learned trial Judge read as under:
30. Lease, including an under lease or sub-lease and any agreement to let or sub-let.
XXX XXX XXX XXX
(c) where the lease is granted for a fine The same duty as is leviable on a
or premium or for money advanced or conveyance under Article 20 for the
to be advanced in addition to rent amount or value of such fine or
reserved. premium or advance as set forth in
the lease, in addition to the duty
which would have been payable on
such lease if no fine or premium or
advance had been paid or delivered:
Provided that, in any case where an
agreement to lease is stamped with
ad valorem stamp required for a
lease and a lease in pursuance of
such agreement, is subsequently
executed, the duty on such lease
shall not exceed ten rupees.
Under Article 30, a lease includes an under-lease or sub-lease and any agreement to let or sub-let. Similar provisions are contained in Article 35 of the Schedule to the Indian Stamp Act and Article 36 in Schedule I to the Maharashtra Act. An agreement to lease may effect present demise or it may not. It is only when an agreement to lease or let effects present demise that it would fall under Article 30 of the Schedule I to the Act. If it does not effect present demise, then the agreement would fall under Article 5 which deals with agreement or memorandum of agreement and more particularly under Article 5(h) under which provision is made for Stamp Duty of Rs. 10/- in case of memorandum, not otherwise provided for. The expression ‘lease including an agreement to let’ would indicate that the agreement to let should be such as could be included within the meaning of lease. It cannot mean a simple memorandum of agreement under which there is no present demise effected.
4. A Special Bench of the High Court of Bombay while construing the provisions of Article 35 of the Indian Stamp Act, 1899 in In Re Indian Stamp Act, 1899, reported in AIR 1952 Bombay 199, held that only those documents fall under Article 35 which effect present demise. If an agreement to lease effects a present demise then it would fall under Article 35 but if it does not then it would fall under Article 5 which deals with agreements or memoranda of agreement. In this context, we may also refer to the decision of the Supreme Court in Trivenibai v. Smt. Lilabal , which was rendered in the context of Sections 2(7) and 17(1)(d) of the Registration Act in which it was held that an agreement between two parties which entitles one of them merely to claim execution of a lease from the other without creating a present and immediate demise in his favour is not included under Section 2(7) of the Registration Act. Section 2(7) of the Registration Act defines ‘lease’ so as to include a counterpart, kabuliyat, an undertaking to cultivate or occupy and an agreement to lease. It was held that the agreement to lease under the said section must be a document which effects an actual demise. The Supreme Court held that ever since the decision of the Privy Council in Hemanta Kumari Devi v. Midanapur Zamindari Co. Ltd. AIR 1919 PC 79, the expression ‘agreement to lease’ has been consistently construed by all the Indian High Courts as an agreement which creates an immediate and present demise of the property covered by it. The decision in Trivenibai’s case (supra) was followed in the decision of the Supreme Court in the State of Maharashtra & Ors. v. Atur India Private Limited and in context of the provisions of Article 36 of the Schedule I to the Bombay Stamp Act, 1958 as applicable to Maharashtra it was held that when under an agreement to lease the relationship of lessor and lessee had not come to be established and there was no actual demise, it was not an instrument chargeable to duty and the question of impounding did not arise, much less there could be a demand for stamp duty. Even in the instant case, the document Ex. 97 does not create any relationship of lessor and lessee between the parties and a future rent note was required to be executed after construction of two floors. There was, therefore, no actual demise or any transfer of interest in presenti at the time when the said document was executed. The document, admittedly, bore stamp duty of Rs. 10/- which is required to be paid on such agreement or memorandum of agreement. In this view of the matter, the learned trial Judge has committed an error in exercising his jurisdiction to impound the document Ex. 97 under the provisions of Section 33 of the Act and the impugned order, therefore, cannot be sustained. The impugned order is, therefore, set aside. Rule made absolute accordingly with no order as to costs.